During Tesla's recent earnings call, CEO Elon Musk unveiled an ambitious plan to manufacture AI chips utilizing Intel's future 14A process technology, a node that is not yet fully complete. This initiative is part of Tesla's broader "Terafab" chipmaking push, aimed at producing its own AI silicon at scale.
Musk expressed confidence in this strategic partnership with Intel, stating, "Intel is excited to partner with us on some of the core manufacturing technologies." He acknowledged the 14A process is "state-of-the-art and in fact, not yet totally complete," but anticipates it will be "fairly mature or ready for prime time" by the time Terafab scales up.
The 14A process is a significant future development for Intel, positioned beyond its upcoming 18A node, which itself is not yet in production. This technology is seen as Intel's effort to regain competitive ground against rival chipmakers. Tesla's move is framed by Musk not as an opportunistic play but as an essential response to anticipated supply constraints, driven by an "existential panic about supply." He emphasized, "We don't see a path to having enough sufficient quantity of AI chips down the road… we just anticipate hitting the wall if we don't make chips ourselves."
This urgency aligns with Tesla's strategic shift towards autonomy and AI as core business drivers, beyond just vehicle sales. Despite a recent year-on-year revenue dip and falling profits due to rising costs and significant investments in AI and manufacturing, securing an independent chip supply becomes crucial for the company's long-term vision.
Musk also hinted at "research ideas" for "radically better AI chips," acknowledging these are "long shot" but could deliver "giant improvement." This long-shot thinking extends to Tesla's other ambitious projects, including the expansion of robotaxis and the development of humanoid robots like Optimus, which Musk believes could become Tesla's "biggest product" in the future, scaling production "slowly" at first but eventually significantly.